Great News for College Students with 529 Plans

The Protecting Americans from Tax Hikes (PATH) Act of 2015 expands the definition of qualified higher education expenses for student beneficiaries under a section 529 qualified tuition program.

The definition is now permanently expanded to include computers, related peripheral equipment, software, and internet access. To qualify, the student must be the primary user of the computer, software, and internet access while enrolled at an eligible educational institution.

Computer software designed for sports, games, and hobbies do not qualify for a 529 plan distribution unless the software is predominately educational in nature.

Prior to the enactment of the PATH Act, the definition of qualified higher education expenses included tuition, fees, books, supplies, and required equipment for the student to attend an eligible education institution.

If you have additional questions about 529 Plan expenditures or savings, contact Simon Lever today, and let’s start a conversation.

By Mike Stolzfus, CPA
Tax Manager